Correlation Between Dongwoo Farm and Hanwha Life
Can any of the company-specific risk be diversified away by investing in both Dongwoo Farm and Hanwha Life at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Dongwoo Farm and Hanwha Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwoo Farm To and Hanwha Life Insurance, you can compare the effects of market volatilities on Dongwoo Farm and Hanwha Life and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Dongwoo Farm with a short position of Hanwha Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwoo Farm and Hanwha Life.
Diversification Opportunities for Dongwoo Farm and Hanwha Life
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dongwoo and Hanwha is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Dongwoo Farm To and Hanwha Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha Life Insurance and Dongwoo Farm is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Dongwoo Farm To are associated (or correlated) with Hanwha Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha Life Insurance has no effect on the direction of Dongwoo Farm i.e., Dongwoo Farm and Hanwha Life go up and down completely randomly.
Pair Corralation between Dongwoo Farm and Hanwha Life
Assuming the 90 days trading horizon Dongwoo Farm To is expected to under-perform the Hanwha Life. But the stock apears to be less risky and, when comparing its historical volatility, Dongwoo Farm To is 1.53 times less risky than Hanwha Life. The stock trades about -0.04 of its potential returns per unit of risk. The Hanwha Life Insurance is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 244,214 in Hanwha Life Insurance on October 27, 2024 and sell it today you would earn a total of 2,786 from holding Hanwha Life Insurance or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwoo Farm To vs. Hanwha Life Insurance
Performance |
| Timeline |
| Dongwoo Farm To |
| Hanwha Life Insurance |
Dongwoo Farm and Hanwha Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwoo Farm and Hanwha Life
The main advantage of trading using opposite Dongwoo Farm and Hanwha Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwoo Farm position performs unexpectedly, Hanwha Life can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hanwha Life will offset losses from the drop in Hanwha Life's long position.| Dongwoo Farm vs. Top Material Co | Dongwoo Farm vs. Youngsin Metal Industrial | Dongwoo Farm vs. Ssangyong Materials Corp | Dongwoo Farm vs. LAKE MATERIALS LTD |
| Hanwha Life vs. Daejoo Electronic Materials | Hanwha Life vs. Solus Advanced Materials | Hanwha Life vs. Incar Financial Service | Hanwha Life vs. RF Materials Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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